Ford, the one major US car-maker that managed to avoid bankruptcy during the recession, is now more profitable than it has been for 13 years, it was revealed yesterday.
And unlike in 1998, when Americans' love affair with petrol-guzzling sports utility vehicles was at its height, Ford's latest quarterly profit was built on strong sales of smaller and more fuel-efficient vehicles. The company's shares jumped 2 per cent in early trading in New York yesterday after it posted a net income of $2.55bn for the first three months of the year, up from $2.09bn in the same period of 2010. Revenues rose to $33.1bn from $28.1bn last year. Analysts had expected $29.7bn.
Alan Mulally, the chief executive, said buyers who plumped for smaller cars to reduce fuel costs were spending more to soup up the vehicles. "They want the features, the content, whether it's a Fiesta all the way up to the F-150," he said. "On the Fiesta, one of the most popular options is heated leather seats – that's on a Fiesta."
Disruption caused by the earthquake, tsunami and energy crisis in Japan did not have a material effect on the first-quarter results, Ford said. The company hopes that lost production can be made up later in the year and in early 2012. Parts shortages across the industry have not yet affected production outside Japan, it added.
Robert Schulz, a credit analyst at Standard & Poor's, said: "When we raised our rating on Ford in February 2011 we expected the North American market to continue its gradual recovery."